October 2, 2024
As Thailand is a contracting state of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, international arbitral awards can, in principle, be enforced in Thailand. However, not all awards will necessarily be enforceable. The Arbitration Act BE 2545 (2002) gives courts the discretion to deny the enforcement of an award if the court determines that enforcing it would be contrary to “public order or the good morals of the people” (often referred to as “public policy”). Similarly, the Arbitration Act allows a court to set aside a domestic award if its recognition would violate public policy. This discretionary power of the court is prescribed by the law and does not require any party to make an argument on public policy grounds to trigger such power. A recent Supreme Court judgment demonstrates that a court considering an award will review the legality of the arbitral proceedings as well as the content of the award. In this case, the Supreme Court set aside an award on the grounds that it violated public policy because it was the result of arbitration that did not proceed in accordance with the relevant law. Under Thai bankruptcy law, after the Bankruptcy Court accepts a request for rehabilitation of a debtor, all civil proceedings against that debtor, including arbitration proceedings, must be stayed until the court orders otherwise or until the rehabilitation case ceases. In this matter before the Supreme Court, however, the arbitrator continued with the arbitration and went on to render an award even after the court had accepted the request for rehabilitation. The award was later challenged to be set aside on the grounds that continuing with the arbitration was against public policy. While setting aside the award was arguably unnecessary, in this case (as the relevant bankruptcy law